INSTITUTIONAL PHARMACY EYED AS SOURCE FOR DIVERTED Rxs

House Criminal Justice Subcommittee
Chairman Mark Souder (R, Ind) put the
blame on institutional pharmacies for
encouraging "gray market" transactions
in pharmaceuticals that may leave
Americans vulnerable to dangerous
counterfeit drugs. During hearings on the
issue in Washington, DC, Souder said that
"‘own use'pharmacies' at nursing
homes or hospitals" are "primary sources
for diversion" of pharmaceuticals today.

By agreeing to provide medication
solely to their own patients, these institutional
pharmacies are able to "acquire
medication at a price much lower than
wholesale," he said. "This opens the door
to fraud," as some hospital and nursing
home pharmacies obtain excess medication
by overstating their patient populations,
and then sell the surplus "at a higher
price into the gray market." Citing
World Health Organization estimates that
10% of global pharmaceutical commerce
this year will be counterfeit, Rep Souder
said gray market diverters were responsible
for spreading these counterfeits to US
pharmacies.

According to the FDA, "drug diversion
was the entry point for every case
investigated by that agency involving
counterfeit drugs going into legitimate
pharmacies," Souder told Congress. This
creates "vulnerabilities that allow counterfeit
or substandard drugs to end up
in legitimate pharmacies" and could
"expose this nation to devastating terrorist
attacks through our medicines,"
he said.